HotStats: Global hotel metrics point toward recovery

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March 2021 GOPPAR in U.S. hotels was the highest it’s been since February of last year and $20 higher than the month before. Photo credit: cyano66

After a year of struggling occupancy around the world, hotels worldwide saw some improvements in March, according to the latest report from HotStats. 

“Though March data is encouraging—and April's will likely be, too—it's important to remember that it's coming off a tremendously depressed prior year,” said David Eisen, HotStats’ director of hotel intelligence & customer solutions, who authored the report. “As demand rebounds, hoteliers will have to be laser focused on converting revenue to profit, in particular because we are seeing some slight uptick in costs.”

U.S.

U.S. hotels achieved “small gains” in most key performance indicators in March 2021, but only compared to “the decrepitude” of 2020, according to the report.

Gross operating profit per available room was up 328.9 percent over the same time last year to $30.63, up from -$13.38 in March 2020, one of eight months of the year when profit was negative. Still, March 2021 GOPPAR was the highest it’s been since February of last year and $20 higher than last month.

March was also the first time in a year that year-over-year revenue per available room was up (4 percent). It was also $20 higher than last month. Both occupancy and rate were at their highest levels since last March, with the former up 5.8 percentage points over the same time a year ago to 36.8 percent.

Total RevPAR hit triple digits to $100.45, aided by the overall increase in rooms revenue, despite still-muted ancillary revenue.

Expenses continued to stay at bay, with total labor costs down 55 percent over the same time a year ago.

Profit margin was up 42.4 percentage points to 30.5 percent, the highest mark achieved since February 2020 and a number more in line with historical levels.

Europe 

European hotels reported -€8.45 GOPPAR for the month—and the region has not recorded positive GOPPAR since the “anemic” €0.81 it achieved in September 2020.

With overall occupancy still falling below 20 percent, rooms revenue continued to lag with RevPAR down 58 percent versus the same time a year ago. TRevPAR was similarly depressed, also down 58 percent versus the same time a year ago. 

Overall expenses were still down, but not enough to push out a positive GOPPAR. Though total labor costs were down 53.3 percent on a per-available-room basis, they were up 6.8 percentage points as a percentage of total revenue, highlighting the dearth in incoming revenue.

APAC 

Asia-Pacific passed the 50 percent occupancy threshold in March, which, combined with average daily rate above $100, led to RevPAR that was 115 percent higher than at the same time a year ago, according to HotStats.

Both TRevPAR and GOPPAR were artificially inflated year over year—118.9 percent and 296.8 percent, respectively—due to the steep decline a year ago. 

Most expenses in the operated and undistributed departments were up year over year—potentially a worrisome sign for other regions. Total labor costs and total overheads were up in the month 13 percent and 14.8 percent, respectively, versus the same time a year ago.

Profit margin in the month was up to 24.5 percent, 51.7 percentage points higher than in March 2020.

Middle East 

Occupancy in Middle East hotels stayed steady in March at just below 50 percent, with RevPAR moving up 58.3 percent year over year to $72.65. As RevPAR rose, so too did TRevPAR, which at $119.74 was 44.3 percent higher than at the same time a year ago. GOPPAR checked in at $37.70 in the month, which was well up over March 2020, when GOPPAR broke even, according to HotStats.

Like APAC, the Middle East is showing signs of cost creep. Though total labor costs continued to be down year over year, both utilities and overheads moved up, a sign that operations are resetting to a closer point of normalcy.

Profit margin of 31.5 percent was 30.7 percentage points higher than last March and more than 12 percentage points higher than February.